* DSG says seeing pattern of "normal recession"
* DSG, Kesa less optimistic than UK finance minister
* DSG FY underlying profit 50.5 mln stg vs f'cst 43.1 mln
* Shares up 1 percent at 0848 GMT (Adds detail, CEO, analyst comments, shares)
By James Davey
LONDON, June 25 (Reuters) - DSG International Plc, Europe's No 2 electricals retailer, said on Thursday it did not expect its markets to recover until the second half of next year, underlining gloomy comments from rival Kesa Electricals Plc a day earlier.
"The recession continues, there's been no significant downward shift or upward shift," Chief Executive John Browett told reporters.
"We're seeing the pattern of a normal recession, that recession is widespread, (and) impacts on all the markets we're operating within."
DSG runs Currys and PC World stores in Britain, Elkjop in the Nordic region and UniEuro in Italy.
On Wednesday Europe's No 3 electricals retailer Kesa, which owns French market leader Darty, Comet in the UK and trades in another 10 nations, said it had seen no recovery in its markets and was not expecting one any time soon.
DSG and Kesa's expectations for the UK are more pessimistic than those of finance minister Alistair Darling, who has forecast growth resuming towards the end of 2009.
"Our internal plans assume that there's no upturn in the (UK) economy until the second half of calendar 2010; I hope that's a very cautious view," said Browett.
"There are people out there who've got more optimistic views, including the Chancellor. I hope he's right."
The CEO's comments came as DSG posted a slightly better than feared 78 percent slump in full-year profit.
Shares in the group have lost 34 percent of their value over the last year, underperforming the DJ Stoxx European retail index by 23 percent, but have risen over 50 percent in the last three months on recovery hopes.
The stock was up 1 percent at 24.25 pence at 0848 GMT, valuing the business at 820 million pounds ($1.36 billion).
DSG made a profit before tax and one-off items of 50.5 million pounds in the year to May 2, compared with an average analyst forecast of 43.1 million, according to Reuters Estimates, and 225.6 million pounds in the previous year.
After one-off charges of 190.9 million pounds, the group made a pretax loss of 140.4 million pounds on total sales down 1 percent at 8.36 billion pounds.
DSG ended the period with net debt of 477.5 million pounds, and had already said it would not pay a dividend.
In April DSG raised 311 million pounds and renegotiated its 475 million pounds banking facilities, strengthening its finances and enabling it to accelerate its store revamps.
Browett said the group was well prepared for the tough environment and would focus on managing costs, margins, stock turn and cashflow.
DSG reduced costs by 95 million pounds in the 2008/09 year and is targeting 200 million pounds of further savings over the next four years. Initiatives are also underway to reduce working capital by 80 million to 130 million pounds.
"We are likely to raise our 2009/10 pretax profit forecast of 55 million (pounds) ... after taking into account the successful disposal of several loss making subsidiaries, the positive impact of the rights issue and placing, encouraging results from the refurbishment programme and a stronger performance from the loss making Italian subsidiary," Seymour Pierce analysts said in a research note. (Editing by David Holmes and Rupert Winchester)